Peel moves company to Delaware, but asset still under watch

Steve Korris Apr. 27, 2006, 3:41am

Gary Peel

Last summer, when attorney Gary Peel declared bankruptcy, he owned 58,000 shares of stock and 43,875 shares of stock options in a Missouri corporation.

Last fall, after counsel for a bankruptcy trustee quizzed Peel about the business, it turned into a Delaware corporation.

The business, Applied Logic of Brentwood, switched its registration from Missouri to Delaware effective Nov. 1.

A month earlier, in a sworn examination by attorney by bankruptcy trustee Laura Grandy, Peel had portrayed the stock as practically worthless.

Although his bankruptcy petition estimated the value of the stock at $50,000, he told Grandy it was overpriced.

He said Applied Logic was $850,000 in the hole and going deeper. He said the bank was not interested in renewing its loan.

Peel also said stock was not sold on the open market and there were lots of shareholders.

He said he and owner William Terry needed an investor with three to five million dollars. He said they had looked for one for about four years.

Applied Logic tracks surgical instruments through sterilizing and reusing.

Peel said Terry gave shares back to the company, "sort of self diluting his interest."

Peel's pessimism did not persuade Grandy. She told the court she believes the value exceeds $100,000.

Peel, having started the bankruptcy process, now wishes to stop it. He has moved to dismiss his petition.

Grandy, on behalf of trustee Carla Randolph, opposes Peel's motion to dismiss. So does regional bankruptcy trustee Nancy Gargula of Peoria.

Gargula intervened after a federal grand jury indicted Peel on charges of obstruction of justice, bankruptcy fraud and possession of child pornography.

Mark Skaggs, counsel for Gargula, wrote that Peel cannot dismiss now that Randolph has discovered assets simply because he does not want to lose the assets.

"This is especially true given Debtor's conduct as set forth above and in detail in the indictment," Skaggs wrote.

Skaggs said April 25 he did not know that Applied Logic switched from Missouri to Delaware. He said he would look into it.

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